Wheat sale sends prices up again

As former Egyptian president
Hosni Mubarak
fled Cairo, wheat prices were hovering at 2½-year highs, underscoring a positive trend for Australian farmers who were anxious that unrest in the world’s biggest wheat buyer could ease demand and cause prices to fall.

On the eve of Mr Mubarak finally succumbing to overwhelming public demand for his resignation, the Egyptian agency responsible for buying wheat stocks was doing business as usual –undeterred by the ­turmoil engulfing the country.

As part of its 170,000 tonnes tender for soft wheat, it agreed to buy 55,000 tonnes from AWB at $US345 per tonne.

The activity sent prices to nearly $US9 a bushel, a gain of 70 per cent since June and the highest level since August 2008.

Soft wheat is used for baked products including biscuits, pastries, cakes and snack foods.

Egypt also bought soft wheat from the United States and Canada.

It was the second time in a week the most populous Arab nation entered global wheat markets, highlighting that even severe instability was not enough to stop buying of a commodity facing shortages after poor weather in key growing countries. Floods have damaged Australian crops while there is increasing concern that drought in China will ­further depress global stocks.

The UN Food and Agriculture Organisation has warned that the drought in regions that produce 67 per cent of China’s crop could put further pressure on prices as the largely self-sufficient country is forced to import stocks.

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Egypt has reportedly bought 4.8 million tonnes of wheat since July 1 after purchasing 5.5 million tonnes last fiscal year.

Earlier, Prime Minister
Julia ­Gillard
said Egypt must have a clear timetable for free and fair elections following Mr Mubarak’s resignation.

A joint statement by Ms Gillard and Foreign Minister
Kevin Rudd
said fundamental reform was needed “that will ensure the opportunity and freedoms that ordinary Egyptians have been calling for".

“Australia calls for constitutional reform and a clear timetable towards free and fair elections and a representative civilian government that ordinary Egyptians have been calling for," the statement said.

It said all Australians will have been moved by “the joy we saw in Cairo’s Tahrir Square".